Virgin Group Case: Creativity and Innovation

Abstract

This paper is a case study on Virgin Group, a multinational conglomerate uniting 60 businesses operating in different sectors of the economy. The recognition of the brand is constantly growing, as there is no region in the world where the work of the Virgin Group’s industry giants would remain unnoticed. Because the company provides more than 60 million customers with its products and services annually, the key to its success should be investigated.

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That is why this paper will make an emphasis on studying leadership and organisational culture based on the assumption that they determine the use of innovative strategies, thus leading to successfulness. Mission and vision statements of the company, together with its values and slogan, are the foundation of the future analysis. They will be supplemented with a thorough review of the company’s innovation strategy and specificities of innovation and product development processes.

Moreover, it will scrutinise risk-taking procedures and techniques. Therefore the central objective of the study is to discover how company culture, product development process, and risk-taking facilitate innovation and contribute to operational success. Based on the findings of the research, the case study will conclude with recommendations for improving performance and growing more powerful.

Introduction

Virgin Group is a multinational conglomerate of industry giants. It unites companies operating in such sectors of the economy as entertainment, travel, energy, publishing, media, healthcare, food and drink, hospitality, business services, retail, sports, lifestyle, charity, and banking. Nowadays, the Virgin Group is 60 different businesses attracting more than 60 million costumers in 35 countries around the globe (Virgin: about us 2016). Virgin companies employ more than 71,000 people worldwide. Figures representing employment and customer base point to the fact that the recognition of the brand is constantly growing, as there is no region in the world where the Virgin Group companies are unknown.

This fascinating story of success and continuous growth began in 1970 with the foundation of Virgin Records by Richard Branson and Nick Powell. Launched as a mail-order record project, it evolved to become the first billion-dollar Virgin company and foster development of other Virgin-branded businesses (Virgin: our story n.d.). During the following five decades, the brand has become one of the most recognisable and desirable ones, as it is synonymous with exquisite service and superior quality.

Nowadays, the most popular businesses are Virgin America, Virgin Atlantic, Virgin Australia, Virgin Business, Virgin Books, Virgin Hotels, Virgin Sport, Virgin Money, Virgin Mobile, Virgin Media, and numerous other related companies (Virgin branded companies n.d.).

Leveraging Innovation Through Mission and Vision Statements

Because the Virgin Group is a conglomerate of more than 60 businesses, mission and vision statements differ across companies and industries. Another peculiarity is the fact that the Group itself does not have a mission statement or motto. However, specific values are what makes it outstanding. That said, “challenging the status quo” (Virgin: our purpose n.d., para. 1) with the aim of becoming an industry and global giants and “changing business for good” (Virgin: our purpose n.d., para. 2) is the core value and central purpose of the Virgin Group’s foundation and operation.

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This slogan affects all Virgin-branded companies because they should work under clearly articulated objectives making all decisions and attracting investment to benefit their customers and the world. Nevertheless, if the Virgin Group were to have a mission statement, it would be something short and fun like the Latin “Ipsum Sine Timore, Consectetur” loosely translated as “Screw it, let’s do it” by Sir Richard Branson (Branson 2013, para. 14). It highlights the understanding of innovation at the Virgin Group – being the best and delivering change without necessarily becoming the biggest (Branson 2014). Both potential mission statement and core values of the conglomerate correspond with this understanding of innovation, and highlight changes are desirable.

According to Neck, Houghton, and Murray (2016), organisational culture is a combination of values, rules, and norms that are appropriate within a company. It is the basis for inspiring employees and reaching high levels of operational performance. Moreover, there is a robust connection between innovations and organisational culture because of motivating and encouraging teams. At the Virgin Group, leadership is the foundation of organisational culture.

Branson’s leadership centres on communication and inspiration. Employees are acquainted with company’s strategic goals and steps that are necessary for achieving them because Sir Richard Branson believes that making change, i.e. innovating, is only possible when everyone is involved in the working process and is motivated to become a part of success (Urso 2014).

In addition, Branson is a perfect example of appropriate and desirable attitude to doing work and completing tasks. He is adventurous, thinks outside of the box, and is not afraid of taking risks. He is the role model for all employees. Branson (2011) believes that a perfect atmosphere is one eliminating fear, whether it is the fear of taking risks or speaking up and becoming involved in the decision-making process. It means that the culture should be liberal and democratic so that every team member is willing to face any challenges and changes and not afraid to bring them to life.

Furthermore, the foundation of the organisational culture is a cooperation between everyone involved in chasing dreams. According to this type of culture, not only fear is avoided, but also ideas for diversification are encouraged and stimulates (Peng 2014). It is supplemented by fostering the ‘we’ atmosphere so that every employee sees themselves as an indispensable element of a team and its success – that leading to high performance instead of preventing it lying at the heart of success (Branson 2014).

To sum up, there are several specificities of the Virgin Group’s organisational culture, which leverage innovation:

  1. Inspiring team members to take risks and foster changes;
  2. Enhancing enthusiasm so that everyone is motivated to make a maximum effort and achieve the company’s strategic objectives;
  3. Guaranteeing that the atmosphere in teams eliminates fear, organisational culture is cooperative;
  4. Relative informality to stimulate trust and openness among team members;
  5. Being willing to face changes and make efforts to implement them;
  6. Fostering the ‘we’ atmosphere.

Innovation and Product Development Process at the Virgin Group

In most cases, the process of implementing innovations is natural and creative at the Virgin Group. For instance, stand-up bars aboard were introduced when Sir Richard Branson himself wanted to talk to one of the passengers but could not leave his seat because of technical issues. This decision was made in order to facilitate communication and making travelling more comfortable. The same approach was applied to offering massage and nail treatment services aboard (Goldsmith 2012).

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Still, there is a general framework for implementing innovations and product development. First, creative idea is noticed or offered. This step is fulfilled either by a team member or some outward people. Sometimes, it can be achieved as a result of conducting research and studying customer feedback. The next step is the presentation of a project to senior managers and Sir Richard Branson himself. It is his approval and available funding that affect launching projects.

However, only most creative and unique ideas are approved (Branson 2011). Moreover, it is imperative to note that the power of research and development are not ignored at the Virgin Group. The conglomerate invests in investigating market and industry gaps, as well as the most recent breakthroughs, with the aim of detecting gaps and determining options for the further innovation process (Branson 2014).

That said, the whole process is made up of the following stages:

  1. Generating a creative idea in order to fill existing market gaps or make services better;
  2. Conducting a thorough research estimating company’s financial resources;
  3. Assessing innovation outcomes;
  4. Bringing considered idea to life.

The Virgin Group’s Innovation Strategy and Rules of Innovation

As mentioned above, according to Sir Richard Branson (2014), innovation refers to becoming better and fostering changes. That is why, in the Virgin Group, there are several rules of innovative strategy. First of all, innovation of the highest calibre is to “get very small, very specialised and very expensive” (Branson 2011, p. 212). The best example of this approach is breaking bigger tasks down into smaller ones and concentrating on addressing them.

On the other hand, it might point to the diversification of offered products and services. In case of the Virgin Group, diversification of operations is the foundation of innovative development (Keeley et al. 2013). Launched in the music sector, more companies were created over time. They operate in different sectors thus offering varying services and are highly specialised. It means that both rules of innovation are strictly followed.

Moreover, Sir Richard Branson (2011) believes that introducing innovations requires conducting thorough research. Because the Virgin Group operates in the services sector, it is imperative to find out how customer’s needs change over time and react to these changes appropriately. The exploration should go beyond official customer feedback or survey because the most accurate information is always found in social networks and on blogs.

Finally, to innovate operations, strong ties with powerful corporations are necessary due to limited inner resources. Nowadays, the conglomerate is in cooperation with the most influential investors of the global economy such as the International Financial Corporation of the World Bank, Eurasia Capital, Delta, Stagecoach Group, Sequoia Capital, Redpoint, and numerous other influential organisations (Virgin: our co-investors n.d.). It makes driving innovative process and continuous improvement possible.

To sum up, Virgin-branded companies operated under the following rules of innovation:

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  1. Become highly specialised;
  2. Differentiate offered products and services;
  3. Initiate change;
  4. Conduct research monitoring both survey and social networks;
  5. Make it happen.

Facilitating Innovation Through Risk Taking

At the Virgin Group, rules are insignificant. Employees are not forced to follow them strictly. Instead, risk taking is extremely valuable and encouraged. The reason for this regulation is the fact that employees, who are not afraid of taking risks, are more likely to lead the company to breakthroughs and innovations. The ground for this statement is the atmosphere in the working environment highlighting that everyone is free to offer changes and ways to implement them, and the process of introducing innovations will not take long and will be supported by senior management if the idea is worthy of attention (Nelson & Quick 2013).

This procedure comes back to Sir Richard Branson himself because he is a risky person and his ideas are always adventure-driven just like the foundation of the Virgin Group. He believes that even if an offer or a decision is not successful, enjoyable experience is what matters at the end of the day. In addition, the Virgin Group preaches the adventure of the joint business, i.e. taking employee’s ideas and opinions into consideration when making decisions because risk taking fosters creativity thus leading to introducing innovations (Branson 2014).

In addition, it should be mentioned that the Virgin Group operates on the basis of fun and thinking different postulates (Kaplan 2013). They as well come from the founder of the conglomerate. Because similar character traits are valued and encouraged, the love of risks is impossible to ignore at the Virgin Group. Some appropriate examples to mention are diversification of provided services and expanding the scale of operations to contrasting sectors ignoring the fear of failure.

Taking a closer look at the expansion of the Virgin Group proves the assumption that the drive for adventure and risk taking are what led the conglomerate to becoming the giant because if Sir Richard Branson was afraid of taking next steps and moving to other industries, Virgin Record might have remained the only Virgin-branded company. Other similar examples are the introduction of massage and nail services aboard and stand-up bars mentioned above (Goldsmith 2012).

Summing up, risk taking is the very essence of the Virgin Group. It is a business philosophy of the conglomerate because it was created by the risk-loving adventurer, who encouraged creativity as the foundation of innovations (Lancaster & Reynolds 2011). Nowadays, being fearless is the most significant character trait of Virgin team members.

Recommendations

Even though innovation and creativity are the foundation of the Virgin Group’s everyday operations as well as making decisions and introducing new services, there are some gaps to fill and recommendations for the future improvement. For instance, regardless of the global recognition of the brand, the Virgin Group focuses on the United Kingdom and preferences of the British people offering some unique services such as beverages and communication options within the UK (Botten 2010).

That said, attention might be paid to the further expansion of the scale of operations abroad. In addition, the introduction of some country-specific services might be a beneficial option. For example, media and communication services should be offered in Australia and the United States just like they are provided in the United Kingdom. One more recommendation is to expand to Asia because this decision will not only become financially beneficial but also present options for creative development and more significant changes in the world. Finally, attracting more talent from different sectors of economy might be useful for the further expansion of the Virgin Group and making it more powerful because new people might bring new creative ideas and serve as sources of inspiration to others.

References

Botten, N 2010, Enterprise strategy, Elsevier, Burlington, Massachusetts.

Branson, R 2011, Business stripped bare: adventures of a global entrepreneur, Portfolio/Penguin, New York, New York.

Branson, R 2013, Richard Branson on crafting your mission statement. Web.

Branson, R 2014, The Virgin way: everything I know about leadership, Portfolio/Penguin, New York, New York.

Goldsmith, D 2012, Creating new products and services: paid to think, BenBella Books, Dallas, Texas.

Kaplan, N L 2013, Management ethics and Talmudic dialectics: navigating corporate dilemmas with the invisible hand, Springer, Frankfurt, Germany.

Keeley, L, Pikkel, R, Quinn, P & Walters, H 2013, Ten types of innovation: the discipline of building breakthroughs, John Wiley & Sons, Hoboken, New Jersey.

Lancaster, P & Reynolds, G 2011, Marketing, Routledge, New York, New York.

Neck, C P, Houghton, J D & Murray, E L 2016, Organisational behaviour: a critical-thinking approach, SAGE Publications, Thousand Oaks, California.

Nelson, D L & Quick, J C 2013, Organisational behaviour: science, the real world, and you, Cengage Learning, Mason, Ohio.

Peng, M W 2014, Global strategy, Cengage Learning, Mason, Ohio.

Urso, T 2014, Sir Richard Branson: a brand leader influence and roleWeb.

Virgin branded companies n.d. Web.

Virgin: about us. 2016. Web.

Virgin: our co-investors. n.d. Web.

Virgin: our purpose. n.d. Web.

Virgin: our story. n.d. Web.

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StudyCorgi. (2021, January 20). Virgin Group Case: Creativity and Innovation. Retrieved from https://studycorgi.com/virgin-group-case-creativity-and-innovation/

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